INSUBCONTINENT EXCLUSIVE:
By David Goodman, Jill Ward and Lucy MeakinEconomists abandoned predictions that the Bank of England will increase interest rates next month
after two weeks of disappointing data and the public doubts of Mark Carney.
The shock near-stagnation of the economy proved the final straw
after the BOE governor raised questions about such a move last week
Firms including NatWest Markets, SEB, Berenberg and ING have now withdrawn their predictions for May, while UBS said it now sees no moves
until at least 2020.
After raising borrowing costs for the first time in over a decade in November, policy makers signaled they may need to
speed up tightening get inflation back to their 2 percent target
Now, as it cools faster than expected, output sputters and Brexit clouds the horizon, officials may no longer be able to justify raising
around 90 percent earlier in April
Bloomberg Economics.
There are also signs of slower growth in the euro area, where France saw the expansion slow by more than half in the
The signs of a global slowdown have prompted central banks the world over to endorse a go-slow approach to exiting a decade of extraordinary
stimulus after the financial crisis.
The past two weeks have taken investors and economists back to square one for their BOE outlook.
While
solidifying after officials said in February that they would have to raise rates faster, and to a greater extent, then they previously
Those expectations remained heightened until last week, when data showed inflation slowing faster than the bank had predicted and retail
2012, proved the final nail in the coffin for many
While there was some impact on growth from snow, statisticians said the overall effect was limited, calling into doubt the underlying
strength of the economy.
It may also add to concern that as global growth moderates, the nation is losing a key buttress of support that
UBS strategist John Wraith
NatWest forecasts a move in August; Berenberg says that November is a more likely month, a view shared by investors, while SEB predicts
through to the end of 2019.
With the GDP number based on less than half the data that will eventually be available, and weather-affected
quarters notoriously volatile, some analysts are sticking to their guns
